Mercado Libre Chief Financial Officer Martín de los Santos led off an earnings call by saying that the company recorded fourth quarter net revenues growth of 45% year over year, supported by the acceleration of its commerce business and the rapid expansion of its FinTech services.
“Crucially, both of these are increasingly supported by the tangible impact of our investments in artificial intelligence,” de los Santos said.
Mercado Libre’s online commerce ecosystem, which serves 18 countries in Latin America, includes an eCommerce platform and a FinTech platform called Mercado Pago that offers digital accounts to individuals as well as accounts and payment processing services to merchants.
In its commerce business, Mercado Libre saw 67% year-over-year growth in the advertising business in the fourth quarter, which it attributed to AI-powered bidding algorithms and automated campaign tools, according to a Tuesday earnings release.
The company also achieved higher total payment value (TPV) per merchant and shortened payback periods by deploying AI tools in acquiring, according to the release. With these tools, it was better able to identify high-value merchants, per the release.
Mercado Libre added AI tools for both buyers and sellers to its marketplace, it said in a Tuesday letter to shareholders.
For buyers, it launched an AI-enhanced search experience in Argentina that personalizes search results based on each buyer’s search and transaction history. For example, using this data, it will display the buyer’s preferred brands or their choice of value options or premium options.
For sellers, the marketplace includes a Seller Assistant that facilitates onboarding, offers recommendations to improve listing quality, creates short-form videos from a single product image and handles customer service inquiries.
“These initiatives are early steps in a broader effort to embed AI across the marketplace to improve discovery, increase relevance and conversion and deepen engagement,” the company said in the letter.
In the FinTech business, the company launched a Mercado Pago AI Assistant in October, according to the earnings release. During the fourth quarter, the AI assistant handled more than 9 million customer inquiries, 87% of which it was able to handle without the support of human operators, according to the release.
“There are dozens of use cases, including general inquiries, making transfers and paying bills, and in the coming months, we plan to expand the Assistant’s capabilities to make it increasingly proactive,” Mercado Libre said in the letter to shareholders.